Devadasan v. V. Mani

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K. BABU** **FRIDAY, THE 11[TH] DAY OF MARCH 2022 / 20TH PHALGUNA, 1943** **RSA NO. 40 OF 2005** **AGAINST THE JUDGMENT AND DECREE IN AS 147/2002 OF DISTRICT COURT,** **PALAKKAD AGAINST THE JUDGMENT AND DECREE IN OS 291/2001 OF MUNSIFF'S COURT,** ## **CHITTUR** ## **APPELLANT/RESPONDENT/PLAINTIFF:** DEVADASAN, S/O.PRABHAKARAN, VANUVANPADAM, NANNIYADU POST, PERUMATTY VILLAGE, CHITTUR TALUK. BY ADVS. SRI.SAJAN VARGHESE K. SRI.LIJU. M.P ## **RESPONDENT/APPELLANT/DEFENDANT:** V.MANI, S/O.VELUKUTTY, SANTHOSH BHAVAN, PAADUR, KAVASSERY II VILLAGE, ALATHUR TALUK, PALAKKAD DISTRICT. BY ADV. SRI.P.R.VENKATESH THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 11.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: R.S.A No.40 of 2005 2 K.BABU, J . -------------------------------------- R.S.A No.40 of 2005 --------------------------------------Dated this the 11[th] day of March, 2022 ## JUDGMENT The judgment dated 18.06.2004 in A.S.No.147/2002 on the file of the District Court, Palakkad, is under challenge in this Regular Second Appeal. A.S.No.147/2002 arose from the judgment and decree in O.S.No.291/2001 on the file of the Munsiff's Court, Chittur. The plaintiff is the appellant. The defendant is the respondent. 2. Material facts relevant for the adjudication of this appeal are briefly narrated below: 2.1. The defendant borrowed a sum of Rs.75,000/- from the plaintiff on 20.01.2000 and executed a promissory note agreeing to repay the amount with interest @ 18% per annum on demand. Even after repeated requests, the defendant refused to repay the amount due to the plaintiff. 2.2. The defendant resisted the suit contending that he has no familiarity with the plaintiff. He has not executed the promissory R.S.A No.40 of 2005 3 note as pleaded. The defendant is a Gold smith. One Sri.Balakrishnan, a relative of the defendant had worked with him. He had availed a loan of Rs.40,000/- from Sri.Kunjukrishnan, brother-in-law of the plaintiff. Sri.Kunjukrishnan demanded the defendant to stand as a surety for the transaction, which was refused by the defendant and thereafter the suit was instituted by the plaintiff at the instance of Sri.Kunjukrishnan. 3. The parties went to trial. PWs 1 to 3 were examined and Exhibits A1 to A3 were marked on the side of the plaintiff. Defendant gave evidence as DW1. 4. The Trial Court decreed the suit in favour of the plaintiff. The defendant challenged the decree in A.S.No.147/2002. The First Appellate Court reversed the judgment and decree passed by the Trial Court. 5. The plaintiff is in appeal under Sec.100 of the CPC before this Court. 6. After hearing both sides, this Court reformulated the substantial questions of law as follows: - (i) Whether the First Appellate Court misconstrued the R.S.A No.40 of 2005 4 evidence while holding that the plaintiff failed to establish the execution of Ext.A1 promissory note and borrowal of the money. - (ii) Has the First Appellate Court drawn the necessary inferences and presumptions that would apply on the facts and circumstances of this case? 7. Heard Sri.Sajan Varghese, the learned counsel appearing for the appellant/plaintiff and Sri.P.R.Venkatesh the learned counsel appearing for the respondent/defendant. 8. The learned counsel for the appellant/plaintiff contended that the First Appellate Court misconstrued the pleadings and evidence while holding that the plaintiff failed to establish the borrowal of money and execution of Ext.A1 promissory note. 9. Per contra, the learned counsel for the respondent/defendant contended that the plaintiff miserably failed to establish the execution of Ext.A1. It is also contended that the plaintiff failed to set up the necessary pleadings to substantiate his case. The learned counsel further contended that while the defendant denied the execution of Ext.A1, the Trial Court should have sent the disputed document for comparison. 10. The plaintiff's case is that on 20.01.2000, the defendant R.S.A No.40 of 2005 5 came to his residence and borrowed a sum of Rs.75,000/- for business purpose. 11. The challenge of the defendant is that he had no acquaintance with the plaintiff. According to him, he has not executed Ext.A1 promissory note as pleaded. 12. In support of the pleadings in the plaint, the plaintiff gave oral evidence as PW1. A relative of the plaintiff, who was the scribe of Ext.A1, gave evidence as PW2. Another independent witness, who claimed to have witnessed the transaction, was examined as PW3. The defendant, in support of his contentions, gave evidence as DW1. 13. The First Appellate Court applied the following reasonings while holding that the plaintiff failed to prove execution of Ext.A1 by the defendant: (i) The evidence of PW2 is not reliable, as he failed to state the purpose for which the amount was borrowed by the defendant. (ii) PW2 stated even the minute details of the transactions while giving evidence. R.S.A No.40 of 2005 6 - (iii) The presence of PW3 on the date on which the alleged - transaction took place at the residence of PW1 is not probable. - (iv) There are discrepancies in the evidence of PW3 regarding the amount actually transacted between the parties. - (v) It is hard to believe that the plaintiff lent a sum of Rs.75,000/- to the defendant even though he was neither his friend nor his relative. - (vi Non-examination of Sri.Balakrishnan through whom the plaintiff got acquainted with the defendant is fatal to the case of the plaintiff. 14. I have meticulously gone through the pleadings of the plaintiff and oral evidence tendered in support of the case of the plaintiff and the oral evidence adduced by the defendant as DW1. PW1 gave evidence in support of the pleadings in the plaint. This Court failed to find any considerable discrepancies in the oral evidence of PW1. PW2 is a witness who had witnessed the entire transaction; it was he who prepared Ext.A1 at the residence of the R.S.A No.40 of 2005 7 plaintiff. PW2 is the nephew of the plaintiff. He is residing 5 kilometres away from the residence of the plaintiff. 15. According to PW2, he was at the residence of the plaintiff on the date of transaction. He came there in connection with some agricultural operations and stayed overnight. In Ext.A1, the purpose of borrowal is recited as 'family necessity'. But, while giving evidence PW2 failed to state the purpose for which the amount was borrowed. The alleged transaction took place on 20.01.2000. PW2 gave evidence on 01.04.2002 that is, two years after the transaction. It is very natural that a witness may not remember the entire recitals in the document prepared two years back. 16. This Court is of the view that non-mentioning of the purpose of transaction by PW2, would not affect his credibility as a witness to establish the transaction and the execution of Ext.A1. Another reason assigned by the First Appellate Court to disbelieve PW2 is that he narrated even minute details of the transaction. I am unable to accept the said reasoning to disbelieve PW2. 17. Yet another reason assigned by the First Appellate Court R.S.A No.40 of 2005 8 to disbelieve PW2 is that there was no probability for his overnight stay at the residence of the plaintiff. As stated above, the plaintiff is his uncle and he stated that he came there on the day before the date of transaction at the residence of the plaintiff in connection with some agricultural activities and he had stayed there. He has specifically stated that he had prepared Ext.A1. 18. The finding of the First Appellate Court that it was improbable that PW2 happened to be at the residence of his uncle, is also not acceptable to enter into a conclusion that his evidence was not reliable. PW3 is a hay merchant, who was also examined to prove the transaction. While giving evidence, he stated that he had witnessed the plaintiff exchanging a sum of Rs.70,000/- to the defendant whereas the amount borrowed by the defendant was Rs.75,000/-. This can only be considered as a negligible discrepancy which would not tell upon the credibility of the witness. 19. Another reason which has weighed with the First Appellate Court to disbelieve the case of the plaintiff is the nonexamination of Balakrishnan through whom the plaintiff got 9 R.S.A No.40 of 2005 acquainted with the defendant. The plaintiff has no case that Sri.Balakrishnan had witnessed the transaction. While examined in cross, the plaintiff admitted that the amount was lent to the defendant as suggested by the Balakrishnan also. As Sri.Balakrishnan was not a witness to the original transaction and execution of Ext.A1, this Court is of the view that non-examination of Balakrishnan is not at all fatal. 20. A further reason assigned by the First Appellate Court to non-suit the plaintiff is that though the defendant was neither a friend nor the relative of the plaintiff, it is hard to believe that a sum Rs.75,000/- was lent to the defendant. The plaintiff has given evidence that he had acquaintance with the defendant from 10 years prior to the alleged transaction. The defendant also admitted that right from 1998, he had acquaintance with the plaintiff. The reasoning applied by the First Appellate Court cannot be legally sustained. 21. On analysis of the pleadings and materials made available, this Court is of the view that the plaintiff established the execution 10 R.S.A No.40 of 2005 of Ext.A1 by the defendant in favour of the plaintiff. Once the plaintiff has established execution of Ext.A1 by the defendant in his favour, the mandatory presumption as provided under Sec.118 of the Negotiable Instruments Act comes into play. The next question to be considered is whether the defendant could rebut the presumption drawn in favour of the plaintiff. 22. In M.S.Narayana Menon v. State of Kerala and another [(2006) 6 SCC 39], the Apex Court held that to rebut a statutory presumption the defendant is only required to establish his case in the standard of preponderance of probability. 23. The case of the defendant is that Balakrishnan had borrowed money from Kunjukrishnan, who is the brother-in-law of the plaintiff and the defendant was asked to stand as surety, which he refused and Sri.Balakrishnan forged Ext.A1 and the same was utilised by the plaintiff at the instance of Balakrishnan to institute suit. 24. In support of the case of the defendant, he deposed in tune with the pleadings in his written statement. Though he raised R.S.A No.40 of 2005 11 a contention that Ext.A1 was forged by Sri.Balakrishnan, he failed to tender any credible evidence to substantiate his contention. The defendant has a case that he had no acquaintance with the plaintiff. In the written statement he contended that the plaintiff is alien to him. While in the initial part of his cross examination, he admitted that he had acquaintance with the plaintiff since 1998. In the subsequent stage of his cross examination, he stated that he got familiar with the plaintiff after the institution of the suit. 25. The Courts shall be slow in accepting the evidence of a witness, who makes inconsistent versions in different stages of the examination. While giving evidence the defendant admitted that he could not say as to whether Balakrishnan had forged or falsely created Ext.A1. So this Court has to necessarily conclude that the defendant failed to give sufficient evidence to rebut the mandatory presumptions drawn in favour of the plaintiff. 26. The learned counsel for the respondent/defendant further submitted that when signature of Ext.A1 was disputed, the Trial Court should have sent the document for expert examination. R.S.A No.40 of 2005 12 It is pertinent to note that the defendant had not made any application to refer the document for expert examination. Moreover, while examined in cross he had categorically admitted that he could not find any discrepancy in the admitted signature in the written statement and the signature seen in Ext.A1. Therefore, the contention of the learned counsel for the respondent is only liable to be repelled. 27. The result of the above discussion is that the plaintiff could establish the execution of Ext.A1 and the borrowal of the amount covered by it. The First Appellate Court has misconstrued the evidence and failed to draw the necessary inferences and presumptions that would apply to the facts and circumstances of this case. Therefore, the plaintiff is entitled to get a decree for the amount covered by Ext.A1. 28. The Trial Court decreed the suit, allowing the plaintiff to realise a sum of Rs.75,000/- with 12% interest per annum. ## 29. This Court is of the view that the interest awarded in view of the nature of transaction between the parties is exorbitant. R.S.A No.40 of 2005 13 Interest @ 4% per annum for the amount decreed from 20.01.2000 will meet the ends of justice. The Regular Second Appeal is partly allowed. The judgment and decree dated 18.06.2004 of the First Appellate Court in A.S.No.147/2002 are set aside. The judgment and decree of the Trial Court are restored with the modification regarding the rate of interest. The parties are directed to bear their respective costs in this proceedings. Pending Interlocutory Applications, if any, stand closed. Sd/- K.BABU, JUDGE KAS